Prince George shakes the Govenor General's wife, Lynne Cosgrove's hand as the Royal party arrive at Sydney Airport (Image: WireImage/Samir Hussein)

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THE Duke of Cambridge has praised Australians and their nation as a "beacon of confidence" as thousands of Aussies turned out to greet their royal visitor and his wife.

William and Kate were cheered by wellwishers during a visit to Sydney's iconic Opera House for a reception to mark the start of their 10-day tour of Australia.

They went on a walkabout around the steps of the famous building greeting the crowds who stood five deep in places. The royal couple had flown to the east coast city after completing a tour of New Zealand with their baby son Prince George.

In a speech at the reception, the Duke said that he and his wife had been looking forward to the visit for a long time and how the Queen held the nation in high affection.

He said: "Her Majesty spoke recently of how, since her first visit here 60 years ago, she has been privileged to witness Australia's growing economy and flowering self-confidence.

"For Catherine, Harry and me, born in the early 80s, we've never known anything else - Australia and Australians have always been for us a beacon of confidence, creativity in the arts and sporting ability."

William's eight-month-old son has been the star attraction of the trip and won the heart of the Kiwis.

His proud father could not help mentioning the baby prince, saying: "I don't think I could finish these brief words to you without mentioning one other family member, George, who is now busy forging his own link with Australia.

"Catherine and I were very grateful for the many kind messages and gifts from across the country that we received when George was born."

The eight-month-old prince is expected to make an appearance on Sunday when his parents take him to Taronga zoo in Sydney where an enclosure housing bilbys - a rabbit-like marsupial - will be named after him.

William joked: "I suspect George's first word might be 'bilby' - only because koala is harder to say. We really look forward to our time here together as a family."

The royal couple arrived as a political scandal broke which forced one of Australia's senior figures to pull out of the official greeting party at the airport and the joint hosting of the Sydney Opera House reception.

Barry O'Farrell resigned as premier of New South Wales a few hours before the royals arrived after a document emerged contradicting evidence he had given to an anti-corruption agency inquiry yesterday.

The politician insisted he had not received a £1,600 bottle of wine from the former chief executive of Australian Water Holdings, a water infrastructure company at the centre of the investigation, but a thank you note he wrote for the wine has emerged.